free cash flow

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Free Cash Flow

A measure of a company's ability to generate the cash flow necessary to maintain operations. There is more than one way to calculate free cash flow, but perhaps the simplest is to subtract a company's capital expenditures from its cash flow from operations. Some analysts believe that free cash flow is more important than other measures of financial health because it measures how much cash a company has and can make. This differs from other measures, which are sometimes accused of using both legitimate and illegitimate forms of accounting to make a company look healthier than it really is.

free cash flow

The cash flow that remains after taking into account all cash flows including fixed-asset acquisitions, asset sales, and working-capital expenditures. The definition of free cash flow varies depending on the purpose of the analysis for which it is being used.

Free cash flow.

A business's free cash flow statement may differ significantly from its cash flow statement. The cash flow statement generally represents earnings before interest, taxes, depreciation, and amortization (EBITDA).

Cash flow and EBITDA focus specifically on the profitability of the company's actual business operations, independent of outside factors such as debt and taxes. Free cash flow, however, reports the net movement of cash in and out of the company.

To determine free cash flow, equity analysts add up all the company's incoming cash and then subtract cash that the company is obligated to pay out, which includes all expenses, debt service, preferred dividends, and capital expenditures. The result tells you how much cash was left over or how short of cash the company was at the end of the fiscal period.

References in periodicals archive ?
- Strained FCF in 2018, as legal settlements more than offset improving revenue and margins.
Due to the flexibility of the FCF it allows different solutions for the client such as Explosion venting, flameless explosion venting or Explosion Suppression systems together with other associated equipment depending on the client's needs and local regulations.
FCF Minerals is the Philippine subsidiary of Metals Exploration Plc, a British-owned firm that was granted a permit to conduct large-scale mining operations in Runruno, a mineral-rich upland community on the Mamparang-Palali mountain range.
Brilliant blue FCF and sunset yellow FCFare used as food dyes in many different products including juices, ice cream, yogurt, jelly and candy [7].
FCF III is serving a market that is both driven by the pharmaceutical industry's urgent need for new products to supplement their ailing pipelines, as well as by strong patient demand for safer and more efficacious treatments and precision diagnostics.
FCF = After-tax cash flows from operations - Incremental investments in operating working capital - Incremental investment in fixed assets and other-long term assets The first component is the after-tax cash flows from operations, or
The FCF will be retained in the FE sector for the coming 2014-15 academic year, but the Welsh Government wrote to universities last month to inform them of their decision to pull funding for HE.
NUS Wales president Beth Button accused the Welsh Government of taking "a page out of the Westminster playbook", likening its scrapping of the FCF - which currently supports around 5,000 students - to the UK coalition's controversial decision to treble tuition fees.
"Anheuser Busch InBev, Roche Holding and Sanofi will be among the biggest generators of FCF, helped by stable demand in the healthcare and food retail sectors.
In addition, the SECP has deposited Rs 20 million, collected on account of fines and penalties during the year ending June 30, 2013, to the FCF.
In addition, the SECP has deposited Rs20 million, collected on account of fines and penalties during the year ending June 30, 2013, to the Federal Consolidated Fund (FCF).